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  • NRI Fixed Deposit Rates in India

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  • Fixed Deposit is a financial tool that lets you earn on your savings over a certain period of time. Under the fixed deposit scheme, the investor deposits a certain amount of money into the account for a period of time and earns interest on the same.

    There are different types of fixed deposit accounts including senior citizen fixed deposits and NRI fixed deposit accounts. Most of the banks in India offer fixed deposit accounts to NRIs (Non Resident Indians). NRIs fixed deposit account is similar to regular fixed deposit accounts except for the interest rates and certain features and benefits.

    NRI Fixed Deposit Interest Rates Comparison

    Given below is a comparison of NRE fixed deposit interest rates offered by some private and public sector banks operating in the country:

    Bank Name NRI FD rates (Per annum)

    Kotak Bank

    7.30%

    United Bank of India

    6.50%

    RBL Bank

    8.05%

    Bharat Co-operative Bank

    8%

    Oriental Bank of Commerce

    7%

    IndusInd Bank

    7.75%

    Axis Bank

    7.50%

    DCB Bank

    8.25%

    Lakshmi Vilas Bank

    8%

    Shamrao Vithal Co-operative Bank

    7.25%

    Yes Bank

    7.25%

    Union Bank of India

    6.75%

    Federal Bank

    7.40%

    Canara Bank

    6.75%

    Central Bank of India

    6.65%

    Corporation Bank

    7%

    Syndicate Bank

    7.15%

    State Bank of India

    6.85%

    Bank of Baroda

    6.85%

    Bank of India

    6.75%

    Allahabad Bank

    6.75%

    Note: The mentioned interest rates are the highest among all the NRE investment tenures offered by the banks for the amount of below Rs.2 crore.

    Types of NRI Fixed Deposits

    A NRI can open fixed deposit accounts. There are three types of NRI Fixed Deposit accounts with banks that are authorized to deal in foreign exchange in India. An NRI fixed deposit account can be opened through three different types of accounts in India. Given below are the three types of NRI fixed deposit accounts.

    • NRE account - NRE account can be opened by a NRI in the form of Fixed Deposit Account. An NRI needs to maintain a minimum maturity period of one year in order to operate a NRE account. The account can be maintained in INR.
    • NRO account - NRO (Non Resident Ordinary) account can be opened by any Non Resident Indian with authorised banks that offer fixed deposit accounts. The interest rates for NRO fixed deposits is determined by banks. NRO accounts can be maintained in Indian currency, similar to NRE accounts.
    • FCNR account - FCNR or A Foreign Currency Non Resident account can be opened by any eligible NRI at authorised Indian Banks. The fixed deposit accounts in this case can be opened for only a term of 1 to 5 years. FCNR accounts can't be opened in Indian currency and can be maintained through foreign currency only.

    Factors that affect NRI FD Interest Rates

    Listed below are the factors that affect the NRI Fixed Deposit interest rates.

    • Amount - NRI fixed deposit interest rates depends on the amount deposited by the NRI in the fixed deposit account. The higher the amount deposited, higher the interest rate offered by the bank.
    • Tenure - The tenure of the fixed deposit account is one of the most important factors that decide the interest rate of a NRI fixed deposit account. Short term fixed deposits do not earn much interest while long term and medium term deposits earn the highest interest on fixed deposits.
    • The bank or financial institution - The interest rate offered on the fixed deposit scheme depends on the bank as in most of the cases, the bank decides the interest rate of the fixed deposit. It is always advisable to opt for a well reputed bank to avail the best interest rates.

    Tax on NRI Fixed Deposit Interest Rates

    The income earned in the form of interest from the NRE accounts are tax free in their hands. There is no taxation on the interest that is earned here and for this reason there will also not be any Tax Deducted at Source (TDS) on the income earned here.

    Eligibility criteria for NRI Fixed Deposits

    Given below is the eligibility criteria that one has to fulfil in order to qualify for a NRI fixed deposit.

    • The applicant must be of Indian origin.
    • The applicant should fulfil the eligibility criteria under factors such as age, minimum income, etc. in order to be eligible for a NRI fixed deposit account of a particular bank.

    Benefits of Fixed Deposits

    Listed below are the various benefits of investing in NRI fixed deposits over a regular savings account.

    • A NRI fixed deposit account will earn you a higher rate of interest than a normal savings account.
    • Single time payment.
    • NRI fixed deposits qualify for auto renewal on maturity.
    • Premature withdrawals are offered for fixed deposit accounts.
    • Some of the NRI fixed deposits are non-taxable.
    • One can avail loans against NRI fixed deposits.
    • Some of the NRI fixed deposits are eligible for tax concession.

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